Why Employee Awards Don’t Work

“I don’t deserve this award, but I have arthritis and I don’t deserve that either.” – Jack Benny

During the 25 years I’ve been in business, I’ve been involved in at least a dozen employee-award programs. I’ve done employee-of-the-month awards, most-improved-employee awards, hardest-working-employee awards — you name it. If I had to add them up, I’d say that I’ve probably handed out more than 1,000 awards for one reason or another — and I don’t think any of them did any good.

In fact, they may have done considerable harm. That’s because of the inevitable arithmetic of individual rewards. For every employee who feels recognized and rewarded, several (sometimes many) feel ignored or even slighted.

This afternoon, about a dozen colleagues and I got into a discussion over this while preparing for my biggest client’s annual company meeting. We were talking about why last year’s meeting didn’t have the morale-boosting impact we had hoped for . . . and why, in fact, none of the award ceremonies we had ever done had really worked.

One problem, DB pointed out, is that the people who get the awards are expected to get them. “They are seen as favorites,” LD concurred. “Our whole group was passed over last year,” one executive pointed out, “and that didn’t boost anybody’s morale.”

We talked about the alternatives — no awards and group awards. And although I’ve always been opposed to group awards because they seem somehow phony or feel-goody, I changed my mind as I heard the evidence. Providing recognition to a division that has exceeded expectations or overcome some unexpected obstacle makes sense and is motivating. It also reinforces the feeling that “we did this together.”

When we examined the impact of group awards historically, it was easy to see that they had worked. Members of the group that got the reward felt motivated, and those outside the group didn’t feel slighted. We traded stories too about the negative effects of individual rewards — the sarcastic comments, the insinuations that leadership was playing favorites, and, much worse, the unseen resentment from so many hard-working employees who felt passed over.

This personal experience is backed up by some studies on the subject (in case you are the type that feels better about “objective” evidence). Such studies say that business groups work better, longer, and with greater job satisfaction when the rewards are given to teams. If you have a policy of formally recognizing individual talent, do yourself a favor. Interview a dozen good employees who didn’t get the award last year and ask them how they felt about it. Ask them if they found it motivating, neutral, or demoralizing. My guess is that most will be diplomatic and say they felt neutral. If that’s the case, take the hint and drop the individual awards. Instead, come up with some meaningful team trophies.

About ETR

Early To Rise delivers science-based systems and structures to help people achieve a higher level of performance. We share proven strategies for success and help our readers steer clear of fads, gimmicks, and frauds. This ensures a win-win relationship between our readers and ETR, and creates faster results for everyone.